Is Usana a Pyramid Scheme? My Take On It
Interested in the business opportunity but wondering is Usana a pyramid scheme? This has been a popular question I’ve been getting lately so I decided to investigate this company and you will want to hear what I have to say. There are definitely some things that you should know, things that the company and its associates don’t want you to know.
Much of the information out there comes from Usana associates that are looking to make money off of you, so you can’t really trust it 100%. Luckily for you, I am in no way affiliated with this company so this review is as unbiased as possible.
Overview of Usana
Usana is a health and nutrition company that was founded by an immunologist named Dr. Myron Wentz.
Unlike many mlm’s that sell products largely based on hype, Usana’s products are backed by science and really are good. They sell anything from supplements for eye health and digestion to exercise supplements such as protein powders.
The shady side of this company comes from their mlm compensation structure. You see, anyone can buy into Usana as an associate by purchasing one of three enrollment packages. After that you can then sell Usana products and earn commissions from each product you sell as well as you can earn money off of recruiting others into the business beneath you.
How Usana Could Be a Pyramid Scheme
When looking at a mlm company you have to look into their compensation plan. What you need to look for is how they push their associates to make money and move up the ranks. Do they push you to sell products to the general public or do they push you to recruit as many people as possible beneath you into the business?
An illegal pyramid scheme will rely on recruitment too much for their revenues, whereas a legitimate mlm will put adequate focus on retail sales.
So for Usana to be a product based pyramid scheme they would have to be overly reliant upon recruitment. And to figure out if they are I’m going to walk you through the compensation plan they have in place…
The Comp Plan
There are 2 main ways that you can make money with Usana: by selling products yourself and by recruiting others beneath you.
As an associate you can make money by selling Usana products. You will be able to buy them at low prices and sell them at an increased rate. You can expect to make 10% or more per sale.
By recruiting other associates into the business you can make money off of what they do. This is how you make good money. You have to take advantage of this mlm structure and recruit as many people into your downline as possible. Everyone that makes good money knows this is true.
The mlm structure is what you call “binary”, meaning there is a left and a right side.
You are at the top of your pyramid and you will have 2 people that are directly beneath you on the first level. Beneath them on the 2nd level there are 4 positions. The associates directly beneath you can fill these positions as well as you and the people above you.
So its not like you just recruit 2 people and then you are done. You should be recruiting more and more to help fill up all the positions that are created if you want to earn as much as possible.
You will earn commissions from both sides of the binary structure, but this will be based on the smaller side. These commissions come from the sum of all the sales on the smaller side.
So lets say the left side had a sum of $25,000 in sales for the week and the right side had a sum of $20,000 in sales for the week. You will only get paid from the amount of $20,000 on both sides since that is the lesser amount.
The commission percentage is set at 10%. So in the example above you would make 10% of $20,000 from the left side and 10% of $20,000 from the right side which = $4,000.
The leftover that you didn’t get commissions from on the bigger side automatically rolls over to the following week.
Usana’s comp plan uses commission points to keep track of everything instead of actual dollars but I’m not going to get into that too much. All you need to know about them is that each product that is sold has a certain point value, and these points are what you are trying to get more of.
One thing that you need to know about the points is that when you reach the level of 5,000 points on each side of your binary structure you will then be able to create another binary structure. And you can do what I talked about above all over again.
If any of this is confusing to you I found this video explanation of the comp plan. I do not own this and it is for educational purposes only.
Pyramid Scheme Maybe?
The good thing about Usana is that everything is based on product sales. If you want to earn a lot of money you can recruit more people, but somewhere along the line there are going to have to be product sales. Every cent of the commissions you earn come from product sales.
The conundrum here is that you can get product sales directly from recruitment. When you recruit someone they have to buy an enrollment package which includes some products to get them started. These packages have a point value that you can make money off of. So you can earn money from recruitment alone.
However, there is still a lot of focus on retail sales so I just don’t think its enough to call this a pyramid scheme in legal terms, although it obviously leans towards that side of things. And I guess the FTC agrees with me because they haven’t shut down this business yet.
Final Thoughts & What I Recommend
The chart below is the official income chart that Usana released from 2014. I know its somewhat old but its the most recent official disclosure I could find.
As you can see, over 90% of all associates made less than $2,500 for the entire year. And you that’s just one statistic I want to point out that says a lot.
The bottom line here is that in order to make it big and be able to earn a lot of money with a mlm like this you have to be a recruitment machine. MLM’s like this have very high turnover rates so you have to be recruiting constantly.
The people that really thrive in these types of businesses are those that have that natural salesperson type personality. You have to be able to sell if you want to make it. You have to be able to sell people on the thought that Usana is a great idea and that they should join.
This is a quality that most people just don’t have and the statistics prove it. Personally, I don’t have anything even close to the personality it takes to make it here. I just wouldn’t be any good at recruiting. If you are like me then I would recommend you take a peek at how I make money online.
I make a living working for myself online, which I think is a pretty awesome job. You can learn more about it by clicking the link below that will take you to a post I wrote.
In the post I wrote I explain what it is that I do, how it all works, and how others can do the same.
Comments, questions, concerns??? Leave them below in the comment section and I’ll get back to you soon 🙂